The case is a formal paper 5 to 8 pages long. There is no title page, no table of contents, and no list of references or appendix. The paper should be formatted using APA style. It is due at the end of the fourth module (or week) of the course.
Target Company is a manufacture company that makes shoes. Once Target Company designs the show, reviews the design and finalized it, the fabric is cut and shaped to the pre designed specifications required for the Shoes. Further, another machine thins the edges so various pieces are easier to sew together.
1-Discuss several production methods and the different accounting systems each requires that Target Company may use.
2. Discuss the cost accumulation process for a Target Company. Is it different for a service organization?
3. Explain the reasons product cost information is important for Target Company managers.
4. How does the Work-in-Process account both describe the transformation of inputs into outputs in Target Company and how Target Company account for the costs incurred in the process?
5. The accounting for Target Company must be familiar with the calculations of total manufacturing costs and cost of goods manufactured. Describe the three categories of manufacturing costs. What is the difference between total manufacturing costs and cost of goods manufactured?
6. Target Co. had the following beginning and ending inventory balances for the year ended December 31, 2014:
January 1, 2014 December 31, 2014
Materials $19,500 $ 8,100
Work in Process $24,000 $13,500
Finished Goods $22,500 $14,500
In addition, direct labor costs of $31,000 were incurred, overhead applied $48,000, materials purchased were $25,500 and selling and administrative costs were $22,000. Target Co. sold 25,000 units of product during the year at a sales price of $5.00 per unit. Calculate the amount of Cost of Goods Manufactured for the year.
These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.Question 1. Discuss several production methods and the different accounting systems each requires that Target Company may use.
Manufacturing business requires effective accounting as they need to measure, record and report the costs involved in the production process. It is important to have an accurate product costing in order to achieve profit goals (Weygandt, Kimmel & Kieso, 2015). Normally, production costs are high and eat into the organization’s profits, thus decreasing the opportunities for the business. To achieve profit goals and retain profitability when manufacturing, Target Company can choose one of the several production accounting methods available for it to apply in its accounting system (Mitchell & Nørreklit, 2017).
First, the company can use job order costing method that sets up the individual accounts to record the costs of production (Weygandt, Kimmel & Kieso, 2015). In this method, accounts include factory labor, manufacturing overhead, inventory, finished goods, work in process, and the cost of goods sold. These accounts are in the general ledger and follow a company’s standard numbering system (Lal, 2015). Here, perpetual inventory systems are used to track inventory costs. These systems are used to update the general ledger account for all the movements of inventory. The method is best fitted for job order costing because manufacturers tend to have multiple jobs working at a given time in the production process. Furthermore, production costs are computed per job where order sheets are used (Weygandt, Kimmel & Kieso, 2015). In the sheets, the necessary materials and labor needed to produce the products are listed. In addition, they help the accountants to track...
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